There are no substantial tax changes and no major changes in the K-12 funding formula and it continues the Ohio Medicaid expansion program, the governor said.

DeWine’s biggest proposals are a new $900 million H2Ohio Fund, which would pay for water quality initiatives over the next decade. He also is seeking $500 million over two years in additional money for K-12 school districts to provide mental health counseling and other support services to at-risk kids.

The first $85.2 million in H2Ohio money would be spent on soil and water conservation programs, surface water protections and creation of wetlands, the budget documents show. The $900 million would be front-loaded into the fund now so it could be used over the next decade.

The budget calls for $74.29-billion in all funds spending in fiscal year 2020 and $76.1 billion in FY2021. Spending in the first year is expected to increase 4.6 percent over the current fiscal year and 2.4 percent in the second year.

The biggest chunk of the money is in Ohio Medicaid, a state and federally funded health care program that covers 2.8 million low-income and disabled Ohioans. The program accounts for $57.6 billion over two years — most of which comes from federal funds.

On Friday, the federal Centers for Medicare and Medicaid Services gave Ohio approval to impose work requirements on able-bodied people enrolled in Medicaid expansion.

DeWine is making children’s health and safety a top priority in his administration.

He is proposing that Ohio raise the tobacco purchase age to 21, up from the current 18. The change would also apply to vaping products.

His budget calls for pouring more state resources into helping kids in foster care, combating infant mortality, and addressing childhood lead poisoning.

The $500 million in K-12 funding for mental health, mentoring and support services will be distributed among Ohio’s 613 districts based on how many at-risk students they serve. Each district will receive a minimum of $25,000 in the first year and $30,000 the second year.

“Many of our children are suffering great trauma. Many of our children today are suffering mental health challenges. We must help these kids,” DeWine said.

School districts can use the money to partner with community organizations to provide the additional services, he said. The targeted support services money would free up cash to be spent on instruction, DeWine said.

The plan drew praise from the Ohio Council of Behavioral Health and Family Service Providers, which said in a statement that the budget provides money for prevention, treatment and crisis services as well as early intervention for kids and families hit by addiction and mental illness.

But the Ohio Federation of Teachers President Melissa Cropper noted that state money for K-12 in 2018 was $610 million less than it was in 2010 and Ohio ranks 45th in the nation for college affordability.

“Funding our future requires raising revenue to make serious investments in families, children and communities. Minor investments will not move the needle,” Cropper said in a written statement.

The DeWine budget will also dial back on state takeovers of failing school districts and limit it to “when a school district has truly failed its students,” the administration said.

The additional spending is expected to be supported by higher revenues. Ohio Budget Director Kim Murnieks said the fundamental of the national economy remain strong, although the pace of growth is expected to slow.

Husted noted that a lack of a skilled workforce is the biggest complaint from employers in Ohio and the biggest hurdle to economic growth.

Ohio College Opportunity Grants for low-income students would be increased by $47 million, according to budget documents.

The Local Government Fund would increase 9 percent in the first year to $412.3 million and 1.8 percent the second year to $419.9 million. The administration is also planning to boost money for local government through other programs, such as adding $60 million for counties for indigent legal defense costs, $8.5 million for public libraries and $140 million for county childrens services agencies.

DeWine said he has no plans to spend money out of the state’s rainy day fund. The state government is expected to end the current fiscal year with a $400 million surplus.

The budget proposal unveiled Friday is just the starting point to the process of setting out the state spending over the next two years. DeWine’s proposed budget will first be heard in the Ohio House and then the Senate. The two legislative chambers are expected to hammer out a final version of the budget bill by the end of June. The governor has line-item veto authority within a budget bill, so he can strike out items he doesn’t like. The General Assembly, though, can override each veto item.

The operating budget debate opens up as the lawmakers prepare to make final changes to the two-year, $7.9 billion state transportation budget bill.

DeWine asked lawmakers to increase the state gas tax by 18 cents a gallon but the Ohio House trimmed that back to 10.7 cents for gas and 20 cents for diesel. The Ohio Senate is expected to put its stamp on the transportation budget next week. A final version is due by March 31.

Add $47 million to the Ohio College Opportunities Grant and $24 million to the Choose Ohio First Scholarship fund over two years.

Triple funding for indigent defense to $90 million per year, increase money for county child protective services to $90 million per year, add $22 million to address childhood lead poisoning and increase spending by $100 million per year on quality public childcare services.